Outsourcing: Breaking Up Is Hard To Do - Page 2

Aug 28, 2008

Robert McGarvey

Easy Pezi, Sometimes

Warnings aside, in some cases, the hurdles turn out to be small. At Internet security company Ping Identity in Denver, Bill Wood, vice president of engineering, relates that when his company shifted a big outsourcing contract (“we were getting sloppy work and the provider had very high attrition”) from India to Russia, “ … we held all the code, we always had, so switching was no more complicated than throwing a switch.”

But in other cases, a transition is lengthy and arduous. When senior healthcare provider Golden Door moved its outsourcing contract, company CIO John Derr said that between “ramped down” efforts by the outgoing provider and the need to bring the new provider up to speed, productivity took a hit for 12 months. And that’s despite the fact the contract provided for a mandatory nine-month period of cooperation with transition on the part of the terminated provider. Detailed contract language also gave Golden Door ownership of all relevant knowledge—“It’s an open question how easy it in fact is to get the knowledge back, no matter what the contract says,” indicates Derr.

Derr adds that those challenging experiences aside, he recently thought about switching providers yet again. But settled for a “heart to heart talk” about what he really needed to see from his outsourcing vendor.

Do understand this however: even when switches go easily, nobody is suggesting that it’s smart business to move to a different outsourcer on a whim, or even on a possibility of saving a small amount of money. That just would not be smart. Ping Identity’s Wood, whose switch was painless, indicates that every week he gets three or four calls from would-be outsourcing partners. He’s happy with his Moscow partner’s price, the work is good quality, so Wood just hits delete on proposals to switch. When the going is good, the good keep going … that is just smart business.



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